University of Georgia Study: Hispanic and Minority Buying Power to Surge

Athens, Ga. — Although the Great Recession has hit Hispanics and Asians particularly hard, their buying power is expected to grow rapidly over the next several years, according to the annual minority buying power report released today by the Selig Center for Economic Growth at the University of Georgia Terry College of Business.

“Despite the recession, the underlying growth trends for Hispanics and Asians in the U.S. are still very strong,” said Jeff Humphreys, director of the Selig Center and the author of the report. “Minorities have a lot of economic clout, and these groups in particular are experiencing growth in buying power that greatly exceeds that of the general population.”

The percentage gains in buying power over the past decade have varied considerably by race and ethnicity: 108 percent for Hispanics; 98 percent for Asians. The buying power of Hispanics will rise from $1 trillion in 2010 to $1.5 trillion in 2015, accounting for nearly 11 percent of the nation’s total buying power.

The report defines buying power as disposable income, or money that is available for spending after taxes. Humphreys said the report provides businesses with a valuable planning tool for judging start–up or expansion opportunities and for tailoring advertising, products and media to individual market segments.

“The Hispanic market alone, at $1 trillion, is larger than the entire economies of all but 14 countries in the world–smaller than the GDP of Canada but larger than the GDP of Indonesia,” Humphreys notes. Hispanic buying power is expected to grow 50 percent in the next five years, from $1 trillion in 2010 to $1.5 trillion in 2015.

Source: U.S. Census Bureau

The report notes that the rate of growth in Hispanic buying power tops all other racial and ethnic groups as well as the rate of growth in overall buying power. Favorable demographic forces are primarily responsible for the anticipated growth in Hispanic buying power, Humphreys notes. Population growth is expected to continue, and the relatively young Hispanic population means that proportionally more young Hispanics are starting their careers and moving up their career ladders. Increased entrepreneurial activity and a rising level of educational attainment also illustrate the upward mobility of Hispanics, the report finds.